Microsoft finally brings Office to iPhone, but did it go far enough?

It faces classic innovator's dilemma when it comes to feature set

Last week, after years of dragging its feet, Microsoft finally released an iPhone version of its popular Office suite. Was it worth the wait? Depends on who you ask.

Microsoft (NASDAQ: MSFT) has a classic innovator's dilemma on its hands, one that IBM certainly faced when it brought the first PCs to market in the early 80s. How do you deliver this new technology without damaging the cash cow that is your existing one? In IBM's (NYSE: IBM) case it was the typewriter division. In Microsoft's it's a combination of its desktop Office and its entire mobile and cloud strategy.

While Microsoft doesn't break down Office revenue in its official earnings statements, suffice to say that Office remains a significant revenue source for them. At the same time, Microsoft is trying to transition from strictly a desktop and enterprise software company to a more cloud and mobile one. The Windows 8 strategy is all about driving adoption across all three platforms.

But Microsoft's strategy remains unsuccessful to this point and it sees Apple (NASDAQ: AAPL) as a direct competitor for all three parts of this business. The dilemma comes into play because Office is profitable and many, many people are using iPhones and iPads at work. They have clamored for Office for iOS for a long time and their desire, up until last week, had fallen on deaf ears. This was probably because it would encourage people to continue to use Apple products and that has to be a stickler for at least some folks inside Microsoft.

Even now, according to Ryan Faas at CITEworld (where I am also a contributor), the company tried to find some middle ground between accommodating iOS users, but not giving them too much. He points out that an iPad version is conspicuously missing and that the product as released was not as robust as some competing products such as Office2, QuickOffice or even Apple's Pages for iOS (which lets you work on Office documents).

What Microsoft has going for it of course, is its own ecosystem including Office 365 and SkyDrive, but whether that's enough to lure iOS users now used to finding other ways to deal with Office documents is the big question.

The problem for Microsoft now becomes one of trying to protect too many fronts. It needs to decide what it wants to be as it transforms from a desktop behemoth to whatever comes next. If it's a services company, and that would seem a reasonable transition, then it needs to be platform agnostic and deliver the whole Office package to iOS and everywhere else.

If it wants to control the devices themselves with a combination of Microsoft-centered OS, software and services, it's very likely going to have rob Peter to pay Paul as it tries to nurture each approach, while never fully committing to any one in a frenetic chase to protect each of the options. That's a very difficult way to go and Microsoft at some point will have some decisions to make.

For now, it has delivered some form of Office for the iPhone and it's available for free from the Apple App Store, but keep in mind you need an Office 365 subscription to take advantage of it.

For more information and details about Office for iPhone:
The Microsoft Office News blog post

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